How to save more money by feeling grateful
What do gratitude and marshmallows have to do with how much savings you have? A lot, actually!
You’ve probably heard about the “marshmallow experiment” before - it was a series of studies about delayed gratification. Famously, kids were asked to sit with a marshmallow and either eat it now, or wait and get two marshmallows later.
They followed up with the kids as they went through life, and found that the ones who waited for two marshmallows had better outcomes in life, broadly speaking. All sorts of positive things were correlated with being one of the people who could delay their gratification.
Now, the ability to delay gratification is helpful in lots of areas of life - the most obvious example being with food. Avoiding making food choices you know are poor for your health (but great for your tastebuds) is an act of pure brainpower. There’s zero immediate benefit, but lots of long-term benefit. You know what you should be doing, but it’s hard to get yourself to actually do it.
The same can be said about financial decision making. You have no doubt heard about “the power of compound interest” and if you’re like any other red-blooded American, you’re a smidge terrified about the state of your retirement account and are pretty sure you should have started contributing more about, oh, twenty years ago.
OK, so delayed gratification is a thing you should care about.
Now what? How do I avoid the marshmallows?
The answer, in short, is gratitude.
A study found that feelings of genuine gratitude helped folks delay gratification. They specifically linked this to financial issues and found that, on average, people in the control portion needed to get roughly two-thirds of the money now that they could have gotten later (specifically, 3 months later) to feel like it was “worth it” to lose the money.
Which means that people were willing to lose about 33% of the value to avoid waiting just 90 days.
But when folks were primed to feel gratitude, they were only willing to lose about 25% of the value to avoid waiting 90 days. That’s a lot better!
OK, I hear what you’re saying. Too many numbers, Lynne! My brain shut off!
Here’s what that means. It means I told you I’d give you about $100 in 3 months, or you could have $66 now. That’s about the threshold where the average person says, “Yeah…I like $100 as much as the next gal, but where’s my $66?” But if first, I had asked you to tell me about something you were grateful for (and you took it seriously, and didn’t just roll your eyes at me) - you’d have said no, until I offered you about $75 now. That means that inducing feelings of gratitude earned you $9*. On every $100, ever.
Think about how much money you have in your savings or retirement account. Now, divide that number by 100, and multiply that number by $9. Add that new number to your old retirement account number. Hm. That’s a pretty significant difference, isn’t it? Now factor in things like compounding and you’re even better, but all of that depends on timing and market changes and that’s outside the scope of this lil’ blog post - but you get my drift. You could also start thinking about the impact of this newfound delayed gratification on poor spending choices you made in college, but we don’t have a time machine, so let’s stop this guilt trip riiiight here. Thanks.
That’s a lot of dough, added up over time, for something you know you’re supposed to be doing anyway! Is it just me, or is every article around about the importance of gratitude? It seems like everyone is hawking gratitude journals and meditating on their #blessings. Snark aside, feeling grateful helps you sleep better, lowers your blood pressure, and improves your immune system; helps you make new friends; and improves your mental health.
And now, it seems - helps you save more money.
That’s pretty good for a quick, free activity you can do anywhere.
Have you found ways to incorporate gratitude in your daily life? Do you think it has helped you save more? Tell me in the comments!
*The numbers in the study were a little bit more precise here, and actually worked out to be an increase of $9.41 per $100, so the impact is even greater than I talk about here - but you get the gist. Feel free to read the study if you speak Academicese.